Banking Investing PERSONAL FINANCE

Investment Options You Can Try With Your Bank

August 27, 2015

Last week I shared to you the many advantages of getting an online bank account. You can read the post HERE. Thank you for the positive feedback from all SavingsPinay readers. I am really happy to have shared a valuable information to everyone.


Now to keep up with all these “valuable information,” I decided to give you Investment Options You Can Try With Your Bank. I know how most of us will have a savings account for our spare money. Yes, having a savings account is indeed a good primer to save money and not waste it but it won’t make you achieve financial freedom.

Why Invest?

Investing is one of the many ways that you can make money work for you. It is something highly suggested by financial planners to start thinking about a good investment venture to try. 

I know for a fact that not everyone is into investing.  Others feel uncomfortable entrusting the money they worked hard for into something high-risk. So for these type of people who can’t take the risk of a mutual fund or stock investing, here are investment options you can try that your bank should probably offer.

Unit Investment Trust Fund


This is something I already featured in a past blog post. Read: What is UITF? Unit Investment Trust Fund or UITF for short is a collective investment thing that banks offer. Think of it as a mutual fund but instead of a trusted private financial group like FAMI, known commercial banks provide this investment option to the public.


How UITFs work?


Money from various investors are pooled together into one fund to accomplish an investment objective. 


To Whom Do I Recommend UITF?


If you don’t have much knowledge about stock market or trading and you don’t  have that much time to really look after your investments, then UITF is for you. I also recommend this to people who just started knowing the benefits of investing and are a dad or mom looking for a better way to save up for the future.


How Much Do You Need?


Depending on the bank you will choose, opening an account is as low as 10,000pesos. You can top up this with as low as 1,000pesos a month.


Return of Investment?


Definitely promise higher return than a savings account. Return will depend of where your money is being investment more commonly known as a portfolio. Your bank will most probably explain how much percentage goes to real estate, information technology companies etc. 

READ: What is Peso Cost Averaging Method?

Retail Treasury Bonds, Treasury Bonds and Treasury Bills


The above investment options may sound foreign for common individuals who are just new to investing. Retail Treasury Bonds, Treasury Bonds and Treasury Bills are backed up by the government so they are pretty safe investment. Let me differentiate the three from each other based on their meaning.


How Retails Treasury Bond, Treasury Bonds and Treasury Bills Work?

  1. Retails Treasury Bond (RTB) is a fixed-income instrument issued by the government as a way of raising funds. 
  2. Treasury Bonds are similar with Retails Treasury Bond but this investment option requires a lower initial investment amount. 
  3. Treasury Bills are almost similar with Retail Treasury Bond and Treasury Bonds but unlike RTB and Treasury Bonds, Treasury Bills are considered short term investments.

To Whom Do I Recommend?

These investment options are perfect for those who have more money to start investing with and also those who have spare money to invest in a long term basis. 

    How Much Do You Need?
    Retail Treasury Bonds, Treasury Bonds and  Treasury Bills need at least 100,000pesos to start investing.

    Return of Investments?

    These are pretty good investment vehicle for individuals who want to grow their portfolio income. A sample computation of Retail Treasury Bonds ROI:

    Money Invested: 50,000pesos in a 3-year RTB

    Coupon every quarter: 8.5%

    Quarterly Interest Rate: (50,000pesos X 8.5% X  1/4) = 1,062.50pesos

    Less Withholding Tax of 20% (212.50pesos)

    Total ROI for every Quarter: 850pesos 

    Time Deposits


    Aside from Savings Account, Time Deposits are the most common investment option of Pinoys.

    How Time Deposits Work?

    The money you invested will be kept by the bank for a fixed period of time. The duration is usually 30 days and can be extended to 60 days or 90 days and more. Your money will earn an interest higher than the usual savings account. Remember though that your money must stay on the back within the given period you choose for if not it may cost you a fee,

    To Whom Do Recommend This?

    This is a perfect investment for someone who don’t have that much money for RTBs, Treasury Bonds and Treasury Bills but want to earn an interest higher than usual savings account. For this I suggest that you choose your bank carefully. 

    Read:  Are You Ready To Ride? Here are Investment Vehicles You Can Try
       

    How Much Do You Need?

    This actually depends on the bank of your choice. There are banks offering a Time Deposit Certificate for just 10,000pesos. The higher the money you will leave in the bank and the longer the investing period is, the higher the return.

    Return of Investment?

    Time Deposits are not considered as high risk because you literally just make your money seat in the bank and wait for it to mature. Interest range may be between 1.5% to 3.5% which is significantly higher compared to usual savings account. 

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    Be better in your finances. Save Now, Invest Now and walk your way to success. Sign up in my Email List and receive templates to get you started in your Financial Wealth. Follow me on Facebook and Twitter for better updates. Godbless 

    Clariza Glino

    Izza of SavingsPinay promotes financial literacy for the young and young at heart by providing insights and tips on budgeting, saving, investing and online entrepreneurship. Aside from this blog she also writes at www.izzaglino.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at izza@savingspinay.ph